Norway Country Brief

Background

The Kingdom of Norway occupies the western and northern portions of the Scandinavian Peninsula in Europe, bordered by Sweden, Finland, and Russia. It shares sea borders with the UK and Denmark. A rugged country of mountains, fjords, and glaciers, Norway covers an area of 385,155 square kilometres including the territories Svalbard (Spitzbergen) and Jan Mayen. Norway also holds sovereignty over Bouvet Island in the South Atlantic Ocean. Norway has a population of 4.7 million of which approximately 80,000 are Sami, an indigenous people living in Norway, Sweden, Finland and Russia. Sami settlements are located mainly in the north of the country. Having one of the world’s highest per capita incomes, Norwegians enjoy a high standard of living, life-expectancy, overall health and housing standards.

Political Overview

Norway is a constitutional monarchy and parliamentary democracywith legislative powers vested in the Storting (parliament). The Head of State is H.M. King Harald V, who acceded to the throne in 1991. The Storting is made up of 169 members directly elected for four-year terms by proportional representation. When the Storting considers legislation it divides itself into two chambers – the Lagting (25 per cent of the members) and the Odelsting (75 per cent of the members) by internal election. Parliamentary elections are mandatory every four years at specific dates.

On 12 September 2005, a Centre-Left coalition (Labour, Socialist Left, and Centre Parties) was elected into government, winning 87 seats in the Storting. The Government is led by Prime Minister Jens Stoltenberg. The Labour Party, which has dominated the political scene in Norway since the 1930s, continues to be the largest party in the Parliament with 36 per cent of the seats. A proposal to amend the constitution to allow the Storting to function as a completely unicameral parliament was passed by the Storting in February 2007, and will take effect following the 2009 elections.

Norway is not a member of the EU, having voted twice (1972 and 1994) not to join. Successive governments have, however, tried to establish the closest links possible with the EU through the European Economic Area (EEA) agreement. Norway has good access to the single market for most of its products through the EEA agreement and participates in regular consultations with the EU on a range of political, trade and security related issues. NATO is the cornerstone of Norway's security policy.

Economic Overview

Norway has a small, open economy with a floating exchange rate. GDP growth is forecast to fall slightly to 3.1 per cent in 2008, from 3.5 per cent in 2007. Inflation is forecast to rise to 3.1 percent in 2008 from 0.8 per cent in 2007. Employment levels remain high in Norway. Unemployment is relatively low by international standards –around 2.5 per cent in 2007.

Norway's emergence as a major oil and gas producer in the mid-1970s transformed its economy. Norway's per capita income is one of the highest in the world due to the large influx of investment capital into its North Sea oil and gas fields and its substantial oil revenues. The petroleum sector contributes over half of Norway’s total export revenue. All production activities take place off-shore in the North Sea and the Norwegian Sea.

In 2008, Norway is Europe’s second largest producer of oil and the fourth largest producer of natural gas. It has approximately half of the remaining reserves of oil and gas in Europe and globally, is the third-biggest oil exporter, behind Saudi Arabia and Russia. It covers 15 per cent of Europe's gas consumption and, within a few years, is expected to increase gas exports dramatically to account for 30 per cent of European gas imports.

Bilateral relationship

Australia and Norway enjoy friendly bilateral relations. As one of the three European Antarctic claimants, Norway is an important interlocutor for Australia on Antarctic issues. A bilateral Working Holiday Maker arrangement came into effect in August 2001, and is a popular means for young Australians and Norwegians to experience each other's country. A reciprocal health agreement came into effect in 2003, a bilateral Social Security Agreement came into effect in January 2007, and a revised bilateral Double Taxation agreement entered into force in September 2007.

The only significant areas of disagreement between Australia and Norway are whaling and Norway's high levels of agricultural protection.

It is estimated that approximately 10,000 Norwegians live in Australia, and over 17,000 Australians claim Norwegian heritage. Australia is also a very popular tourist destination for Norwegians. The total annual number of arrivals from Norway (for all purposes) is currently estimated at about 15,000.

Former Special Minister for State, the Hon. Gary Nairn MP visited Norway in December 2006. Other visits include: Tasmanian Minister for Health and Human Services, The Hon. Lara Giddings MHA December 2006; Australian Parliamentary delegation April/May 2006; Former Minister for Immigration and Multicultural and Indigenous Affairs, the Hon Philip Ruddock MP in April 2002; and Former Minister for Justice and Customs, Senator the Hon Amanda Vanstone in November 2000. The Norwegian Minister for the Environment and International Development, Mr Erik Solheim visited Australia in May 2008. Other visits from high level Norwegian officials include: Prime Minister, Kjell Magne Bondevik in March 2005; Minister for Education, Ms Kristin Clemet in October 2004; Minister for Education, Youth and Ecclesiastical Affairs, Mr Trond Giske in September 2000; State Secretary for Trade and Industry, Mrs Harriet Berg in April 1998.

Australia's Ambassador to Norway is based in Copenhagen, and there is an Honorary Consul in Oslo. Norway maintains an Embassy in Australia (Canberra) and there are Consulates in all States and in the Northern Territory.

Bilateral Economic and Trade Relationship

Major Australian merchandise exports to Norway (A$115 million in 2007) include inorganic chemical elements, aluminium and alcoholic beverages. Imports from Norway in 2007 were worth A$409 million.

Two-way trade in services was valued at A$422 million in 2006 with Australia as one of the top destinations for Norwegian students overseas with some 1,479 student visas granted in 2006-2007.

Norway and Australia share common expertise in various industrial sectors, including oil and gas, mining, chemicals, and marine and shipping. This indicates a receptive market for Australian technology and expertise in these sectors. There are a number of significant Norwegian companies with direct investments in Australia. These include the Kvaerner Group (oil and gas), Norsk Hydro (fertilisers / aluminium production) and Dyno Wesfarmers (explosives).